Micron stock slides again this week, and it is not just profit taking after a wild run. Shares closed down 5.9% at $823.03 on Friday, giving back a good chunk of Thursday’s 18% jump, right as interest rate worries came roaring back into the conversation. A broader stock forecast question sits underneath all of this, along with a debate over the current Micron stock price and whether the stock stays undervalued even now.
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Why Micron Stock Slides After A Big Rally
The drop really comes down to three Federal Reserve policymakers, the ones who dissented against holding rates steady, explaining out loud why they still think the Fed should raise rates. Higher rates tend to squeeze both consumer spending and corporate spending, and that eventually trickles down into Micron’s own sales numbers too. Big run ups like Thursday’s 18% surge tend to invite exactly this kind of pullback, and that left the stock open to profit taking on Friday. It has been a genuinely volatile stretch, and plenty of investors still aren’t sure how long this memory boom can keep going.
Apple helped calm some of the nerves during its own earnings call this week, at least on the demand side of things.
Tim Cook, Apple CEO, said:
“For September [the third quarter], we expect to pay even higher memory costs.”
Cook only touched on the idea of new suppliers stepping into the memory market briefly, and he never said Apple planned to buy chips from Chinese manufacturers for devices it sells in China. That threat has weighed on the Micron stock price at various points recently, though right now it still looks fairly distant. Drops driven by rate fears tend to fade faster than drops that reflect real demand worries, and this looks a lot more like the first kind.
Micron Stock Forecast And AI Demand Outlook
Amazon raised its 2026 capital expenditure guidance to $220 billion, up from $200 billion, and pointed straight at higher memory chip costs as the reason why. That is basically the Micron AI demand story in one sentence, and it explains a big reason the stock forecast still points higher even after this week’s pullback. Micron’s own leadership has said as much too, more than once, at the time of writing.
Sanjay Mehrotra, Micron CEO, said:
“AI driven-demand is accelerating. It is real. It is here, and we need more and more memory to address that demand.”
Mehrotra has also talked about a longer runway behind this same wave of Micron AI demand, telling analysts he expects durable industry fundamentals to hold into 2027 as memory supply stays tight. Wall Street seems to agree with him, since several major banks have also raised their price targets on the stock this year, and that has helped push the Micron stock price higher over time even with weeks like this one mixed in. Sharp pullbacks do happen even in strong years, and this week gives a pretty clear example of that.
Is Micron Stock Undervalued Right Now
Micron trades at under six times forward earnings right now, and its heavily locked-in revenue explains a lot of the case for the stock staying undervalued. The company has secured over $100 billion in long term supply contracts, plus roughly $22 billion in customer prepayments, and a lot of that revenue does not move around with short term memory pricing the way it used to.
Sumit Sadana, Micron Chief Business Officer, said:
“These strategic customer agreements cannot be canceled. There is no provision in this agreement to allow a customer to walk away.”
That kind of structure explains a big part of why the Micron stock undervalued argument keeps holding up, even after a genuinely volatile week for the shares. Samsung and SK Hynix are not going anywhere, and Micron’s own history of boom and bust margin swings stays real too, so none of this is a guarantee. Some traders even question whether the Micron stock undervalued case resets every time shares jump 15 or 20 percent in a single week. Still, traders tend to read Micron stock slides like Friday’s as more of a pause than an actual reversal, and the underlying Micron AI demand story looks fully intact for now. Sharp drops keep happening, memory demand keeps climbing anyway, and that tension will probably define this stock for a while yet.
